Why should I Salary Package with TFM?

If you think salary packaging is just for big earners -
think again. Anyone who earns a salary can keep a little more
to themselves because of laws that allow employees to replace
some of their cash income with items like laptops and car
leases.

What is Salary Packaging?

Salary packaging is an arrangement between you and your
employer, which allows you to sacrifice some of your salary in
return for a benefit of the same value. By paying for this
benefit with pre-tax dollars, you reduce your taxable income
and therefore increase your disposable income.

When you salary package using pre-tax salary, you reduce
your taxable salary, therefore reducing the amount of Pay As
You Go (PAYG) tax you pay. To offset this reduction in PAYG
tax, the Australian Taxation Office (ATO) levies another tax
called Fringe Benefits Tax (FBT).

What can I Package?

There are many ATO approved items you can include in a
salary package, although the choice will depend on the FBT
status of the organisation you work for, as well as the items
your employer has selected for inclusion in their salary
packaging program.

Click a link below to view items available under each
employer category.

Public Hospitals and Charities (PBIs)

Public Benevolent Institutions (PBIs) include public
hospitals and other charities.

As an employee of a PBI - Charity (non-hospital), you
receive the first $15,900 of most benefits completely free of taxes
(no PAYG or FBT).

As an employee of a PBI - Public Hospital, you receive
the first $9,010 of most benefits completely free of taxes (no PAYG
or FBT).

This means you can salary package either $15,900 or
$9,010 from your pre-tax salary each FBT year (April- March),
therefore reducing your taxable income by this amount and
providing you with substantial benefits.

Within the limits, you can choose to package a range of
items including your mortgage, rent, personal loan or school
tuition fees. You may also choose our convenient
Transaction Card to package everyday living expenses such as
groceries, bills, clothes etc.

In addition, there are other items you can package
including motor vehicles, laptops, portable printers and mobile
phones. You can also package additional superannuation
contributions to a fund of your choice.

Our Meal Entertainment Card is also available with a separate FBT exemption threshold of $2,650
and can be used to pay for food and
beverages in dine-in cafes and restaurants.

Rebatable Organisations

Salary packaging is an arrangement between you and your
employer, which allows you to sacrifice some of your salary in
return for a benefit of the same value. By paying for this
benefit with pre-tax dollars, you reduce your taxable income
and therefore increase your disposable income.

As an employee of a rebatable organisation you are
entitled to an FBT rebate (47% rebate applies) on amounts
salary packaged up to $15,900 per annum ($30,000 grossed up).
FBT exempt items can be packaged in addition to this limit.

Motor vehicles are commonly packaged due to the PAYG tax
and GST savings. Work related (FBT exempt) items such as
laptops, portable printers, PDAs and mobile phones are also
popular. Expense items such as mortgage payments and health
insurance may be packaged in some circumstances.

Corporate or Government Entity

Salary packaging involves sacrificing part of your gross
salary to receive other non-cash benefits. Those benefits
attract varying rates of FBT and some benefits are FBT exempt.
There is no PAYG tax payable on the amount sacrificed, hence
reducing your taxable income.

Motor vehicles are commonly packaged due to the PAYG tax
and GST savings. Work related (FBT exempt) items such as
laptops, portable printers, PDAs and mobile phones are also
popular.